Minister responds to DFOB going into receivership

The Minister said: "The announcement of receivership was clearly disappointing news. It is also a reality that many associated with DFOB will have lost money. These events bring home starkly the real difficulties facing businesses during the current recession and in particular the trading pressures within the dairy industry. "My officials and I are maintaining close contact with the receiver and with UK Government interests. Closer to home, my focus is on the milk producers in Wales supplying the two Welsh facilities - Llandyrnog in North Wales and Bridgend in South Wales. These plants currently employ some 380 with milk supply from around 220 Welsh dairy farmers. "The receiver is, with the support of DFOB's bankers, HSBC, continuing to trade: farmers who remain with the business will receive a payment for their milk in the middle of this month and again at the end. The level of payment will depend on the price the Receiver can realise for the milk produced. "Farmer members are not being held to their previous DFOB contracts and I understand that approximately half of DFOB's milk volume may have moved to other buyers already, representing about a third of their members. I understand that the hauliers will continue to collect milk from those remaining with the business, who will be paid regularly at a fair price for the supply. "The Receiver has, with the chair of DFOB's Member Council, been holding meetings with members and ex members of DFOB around the country at which members will be able to ask direct questions and make sure the receiver is aware of their situation. "I trust that Assembly Members will share my support for the efforts that the Receiver is making to re-assure milk producers in Wales who have been supplying DFOB. The industry as a whole has worked constructively to try to ensure that the complex supply arrangements between DFOB and other businesses continue to operate smoothly. "I can well understand the market forces that will have led to a number of milk producers in Wales to seek an alternative to DFOB or those who are considering their future options. No producer shouId feel pressured to change in what I recognise is a difficult and uncertain time. "With regard to the Llandyrnog site, which employs some 160 people at the factory, the Receiver is reasonably confident that a sale to secure the future of the facility can be concluded to the satisfaction of suppliers and customers alike in the not to distant future. "The position at Bridgend, employing some 220, is not so advanced although I understand that there is commercial interest in the facility. A key factor here is that suppliers and customers need to demonstrate confidence in the creamery. "The Receiver and officials have agreed to keep closely in touch on developments and on his plans for the remaining businesses, and continuing to ensure a steadying influence. Officials have also kept in close touch with Dairy UK as the trade body representing the industry, and with the farming unions. "Through all parties working together I hope that we can minimise the short term impacts on the industry and individuals, and maximise the chances of finding buyers for the remaining businesses, giving more certain long term prospects to farmers, employees, and other dependent businesses. But there remain difficulties for the way forward in assisting all of them. I will update you as necessary."